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This graph shows the progression of Total Market Value over Q1. There's not much to say here, as most people are already aware that inflation is a thing that is going to happen. Instead, I'll discuss inflation itself, since it seems to be a topic of interest, and understanding it is important to how the game functions.
>Why is inflation bad?
Volume Inflation makes it more difficult for players to influence the market in a reasonable amount of time, causing price stagnation and overreliance on adjustment time to make meaningful trading decisions. There's a balancing act here: If you're a trader that generally can't trade at or near adjustment time, overaggresive Volume Inflation will mean you have more time to make adjustment-based plays, as it will be longer before transactional volatility drags the coin back to pre-adjustment (if it does at all). As a trade-off, this reduces the impact of single-day trading, which is something lower-end traders deseperately need to get into the market, and higher-end traders can use to cut ahead of their rivals.
Value Inflation reduces the worth you can get out of obtaining or holding liquid. This forces more and more players to focus on progressively longer-term plays, as short-term plays that involve holding liquid become less viable. Remember: Liquid sitting in your wallet is not making you money, and does not increase in value, while coins you've invested in WILL typically increase in value. However, some short term plays rely on you procuring and camping on liquid to make a stronger play later on. If Value Inflation is too aggressive, these plays become less viable and must be executed on tighter windows of time.
Note that both forms of inflation are unavoidable: the goal is not to eliminate inflation, as it is impossible to do so in a non-zero-sum game, but to MANAGE inflation instead, preventing either form of inflation from getting too aggressive.
>Just fucking manage the inflation then. Why's that a problem?
The difficulty is that you can easily see a trendline when it's something that's already happened, but it's difficult to predict the future, even when you have all of the past data and patterns in front of you. If you've opened the graph, you may have noticed a large spike between the 20th of Feburary and the 6th of March. So what the hell was that? That was the response of the market crashing hard on the 26th, then rebounding on the 27th. A bunch of high-profile coins went into the -20~30% range, and people bought the fuck out of them. Remember this. It will also be on the test.
Tomorrow, we'll cover more granulated movements among groups of coins. In the meantime, the Financial Underwriters of Comprehensive Knowledge would like to remind you to stay informed, shitpost responsibly, and FUD accurately.
